An empirical method for assessing the research relevance gap

There has been much debate on the relevance to firms of the academic research produced by business schools. However, what has not received as much attention is how the relevance of the research to businesses should be measured in a systematic and empirical way. We develop a systematic method to test for the relevance of academic research to businesses. Our method models as a vector autoregressive process the interests of the academic and practitioner communities in some new topic, as expressed by the number of articles published in the academic and the practitioner literature on that topic per calendar quarter, and then studies Granger causality between the academic and practitioner interest processes. This method can be used by academics to empirically demonstrate the impact of their intellectual contributions on practitioners and thence on the business world. We employ our approach to two relatively new and important topics, Real Options and Economic Value Added.